Czech Industry Fears competitive Disadvantage as Germany reduces Electricity Prices
Czech companies are expressing concern that a notable reduction in electricity prices for industry in Germany will negatively impact their ability to compete. Robert Záboj, head of Koh-i-noor Machinery, stated, “If in the surrounding countries, especially in Germany, there is a significant reduction in the price of electricity for industry and not in the Czech Republic, there will be a difference that will gradually be reflected in production prices and in the ability of companies to keep up with foreign competition.” He further explained that industries like plastic injection and mold making, which are high energy consumers, will notably feel the impact, though electricity price isn’t the sole determinant of competitiveness.
The concern stems from a broader issue of European competitiveness. The article notes that energy prices in the United States are up to four times lower than in Europe.
In response,the incoming czech government,comprised of ANO,SPD,and Motorists,is planning measures to lower electricity costs for both households and businesses. Karel Havlíček, vice-chairman of ANO and candidate for minister of industry and trade, has advocated for the state to take over payments for renewable resources, while also pointing to investments already made in transmission networks using European funds.
According to Alena Schillerová, the probable future finance minister, the government intends to implement thes measures as early as January, irrespective of Germany’s actions. The plan requires 18 billion Czech crowns from the budget.
However, experts warn that the proposed Czech measures may not be sufficient. Pavel Juříček believes the planned 10% energy discount “will put enormous pressure on Czech industry.” Deloitte chief economist David Marek agrees, stating that even with all available government steps, the Czech Republic won’t match Germany’s projected price of 55 euros per megawatt hour, compared to an estimated 80 euros in the Czech Republic. Marek described this potential disadvantage as “really essential.”
The German proposal is currently awaiting European Commission notification and coudl potentially be blocked. Outgoing Minister of Labor and Social Affairs Marian Jurečka (KDU-ČSL) anticipates this will trigger negotiations among European states, leading to a reduction or narrowing of the German plan. He believes, “Now there will be a big negotiation. It will definitely be cut, it will definitely be narrowed.”
